Washington Week: SGR Fix Passed

WASHINGTON -- Congress passed a bill to delay a scheduled 27% cut in Medicare payments by 10 months, and the president released his 2013 proposed budget, which requests a slight increase for health programs.

Congress Passes SGR Deal

The House of Representatives voted 293-132 late Friday morning to pass a compromise bill that would delay the Medicare rate cut, and the Senate passed it by a 60-36 vote less than an hour later.

The compromise -- which also provides a year-long payroll tax cut extension and an extension of unemployment benefits -- would hold Medicare payment rates to doctors steady at 2011 rates through this year. Without legislative action, a 27.4% reduction in Medicare payments was scheduled to kick in on March 1. The cut is called for under the sustainable growth rate (SGR) formula.

The price tag on the "doc fix" is close to $18 billion and will be paid for by cutting other areas of the budget, including certain provisions in the Affordable Care Act (ACA).

Doctor's groups were relieved the 27% cut wouldn't go into effect, but called the bill a missed opportunity to permanently repeal the SGR.

Obama's Budget

President Obama released his proposed 2013 budget this week, and it includes a slight increase for the Department of Health and Human Services (HHS) -- but it's coming at a time when his Republican adversaries are calling for budget cuts, not increases.

Highlights of the $76.4 billion budget include: $4.8 billion for the Centers for Medicare and Medicaid Services, the bulk of which will go toward setting up the ACA-mandated state insurance exchanges; $31 billion for the National Institutes of Health; $5 billion for the CDC; and $4.5 billion for the FDA, nearly half of which will come from anticipated user fees from the pharmaceutical, device, food, and cosmetics industries.

Part of the increase in user fees comes from a $595 million agreement reached by the FDA and the device industry under the Medical Device User Fee Act (MDUFA).

MDUFA was the subject of a congressional hearing on Wednesday, during which the head of the FDA's Centers for Devices and Radiological Health said that the increased user fees will allow the agency to hire 208 new full-time staff members, which will lead to shorter wait-times for FDA approval of new devices.

Obama's budget proposal also includes a provision that would allow businesses with up to 50 employees to qualify for a tax credit to offset the costs of providing health insurance for workers. The tax credits currently available under the ACA are available only to employers with fewer than 25 employees.

ICD-10 Delay

HHS Secretary Kathleen Sebelius announced Thursday that HHS will start the process of postponing the date by which doctors must comply with the new ICD-10 coding system.

ICD-10 has five times the number of diagnosis codes currently used in ICD-9 and was scheduled to become effective on Oct. 1, 2013. Doctors have protested the costs and complications of implementing the changes, especially with other health IT and ACA requirements.

Feds Recoup Healthcare Fraud Money

The federal government recovered $4.1 billion in fraudulent healthcare payments in fiscal 2011, the largest amount ever collected in a single year, federal officials announced Tuesday.

Ramped-up fraud-fighting efforts led to a 50% increase from 2009 to 2011 in judgments and settlements of payments fraudulently obtained from Medicare and Medicaid, according to the Justice Department and HHS.

The payback results from another record number: criminal charges were filed against 1,430 defendants for healthcare fraud-related crimes, according to HHS.

Employer-Based Insurance Down

The percentage of Americans who received health insurance from an employer dropped in 2011, according to a Gallup poll.

About 45% of Americans had insurance through their employer in 2011, compared with 49% in 2008, when the decline began, the poll found.

Job loss wasn't the only reason, authors of the report said. Even Americans who were still working in 2011 -- in both full- and part-time jobs -- were less likely to get insurance from their employer.

Next Week

Members of Congress will be in their home districts next week for the President's Day recess.

On Tuesday, the Kaiser Family Foundation will hold a discussion on what the president's budget means for global health efforts.

On Wednesday, the FDA's Endocrinologic and Metabolic Drugs Advisory Committee will vote on the benefit/risk ratio for weight-loss pill phentermine/topiramate (Qnexa). In 2010, the same panel voted down the drug, and the FDA rejected it later that year. Wednesday's panel will consider new data on the drug's teratogenicity.

On Thursday, the Pulmonary Allergy Drugs Advisory Committee discusses a new drug application for aclidinium bromide for long-term maintenance of bronchospasm associated with chronic obstructive pulmonary disease, including chronic bronchitis and emphysema.

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